Mike Burton, Director of Hampshire-based housebuilder Metis Homes, has commented in advance of this week’s 2023 Spring Budget by the Chancellor Jeremy Hunt.
Housebuilding
“More support is desperately needed for the housebuilding industry to enable us to build more homes, so it is disappointing to not see this being tabled, ahead of Wednesday’s Spring Budget. Simon Clarke, former housing minister, reportedly said that every 100,000 homes built in the UK adds 1% to GDP, so the importance of increasing housebuilding output to aid economic recovery and growth is obvious at a time when the UK needs all the help it can get.
“The Home Builders Federation (HBF) recently reported that housebuilding rates are set to fall to their lowest level in decades, due in a large part to planning policy changes and the impacts of government department intervention on environmental grounds. 93% of SME developers said that planning was the most significant barrier to growth, and I couldn’t agree more. This is an area which requires urgent focus from Ministers to both benefit the economy and ensure that appropriate housing for generations to come is delivered.”
Energy Bills Support & New Builds
“As energy prices have a real impact on all households and businesses, the decision to extend the Energy Bills Support Scheme would be welcome in providing further certainty. Energy costs have a significant financial impact on housebuilding, from premises, raw materials, and the production of new homes, to the costs for our labour force and our buyers. Over the past 12 months, energy price hikes have raised awareness of the benefits of buying a highly sustainable energy efficient new home, which has been an unintended positive for the industry. It would be good to see this promoted more by the government.”
Fuel Duty Cuts
“At a time when costs are still a challenge for many, any continuation of control over fuel prices is welcomed, even if it’s only avoiding an increase rather than providing a saving. Fuel costs affect all elements of the housebuilding lifecycle – the cost of running plant and machinery, deliveries to site, the cost of manufacturers’ raw materials, the site’s labour force commuting costs, and the impact of rising costs on our customers and how this may affect their ability to purchase a house. This inherently increases construction cost and can reduce the pool of new homes buyers. Any financial help here would be well received by the housebuilding industry.”
Corporation Tax Rise
“At a time when economic growth should be a core objective of the government, continuing with the proposed raise in corporation tax will only stifle economic growth, as well as making the UK a less attractive business environment from a global perspective. Where there is normally reliable profitability, the housebuilding industry is seeing this projected to fall this year, as a result of the economy’s current state. The government’s ongoing changes to planning policy and environmental issues – and then taxing businesses at a higher rate – will only further impact investor sentiment and the amount of capital available to reinvest.”
Super Deduction Axed
“The UK economy is in a global marketplace for investment, however we are in an unsettling position. Having only just staved off entering into a recession at the end of last year – we must ensure we are a comparative investment proposition to other countries. The removal of investment incentives does the direct opposite of this and by cutting the super-deduction, it will discourage reinvestment. It is vitally important that it is replaced by a new scheme which can continue to attract and incentivise investment at such a critical point in the economic cycle.”
Getting long term sick back to work
“Absence because of long-term sickness is an area that all employers must deal with in a careful and respectful manner to ensure that employees’ needs are looked after, first and foremost. The idea of changing the system to allow people to work with more support, rather than being signed off must be managed on a case-by-case basis. One rule for all simply won’t work in practicality and may even become more challenging for employers and employees. Providing employers with a greater breadth of options to make sure that the needs of the employee can be met whilst also ensuring that economic productivity is improved is the key and should be the focus of the government’s policies.”
